The process of international accounting regulation is somewhat
diffuse. Many organisations, e.g., the International Accounting
Standards Committee (IASC), the Organisation for Economic Co-operation
and Development (OECD), and the United Nations (UN) are involved -- each
with its own different constituency, authority structure, and more
importantly, its obj ectives. The third world nations' demands for
greater disclosure by Transnational Corporations (INCs) have been taken
up by the UN -- a debate to which the OECD and the lASC have also
contributed. Negotiations over an acceptable set of disclosure
standards have been carried on at the UN for more than twelve years.
During this period the UN has repeatedly changed its position and has
eventually failed to come up with a comprehensive set of final
recommendations. It has, in effect, abandoned its pioneering stance as
an accounting policy maker. This research attempts to investigate this
failure of the UN by examining in some depth the accounting policy
making process of the UN - - which in many senses reflects the tussle
between the third world nations and the developed market economies. The
political nature of accounting policy making is recognised and political
concepts of '~' are used to understand and explain the process. In
particular. the decision-oriented (i.e. One-Dimensional) pluralist
methodology of power is used to analyse the conflicts and policy
outcomes at the UN.
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Empirical evidence shows that organised pressures from the TNCs,
co-ordinated under the joint forum of the International Chamber of
Commerce (ICC) and the International Organisation of Employers (IOE) ,
was strengthened by the support given by governments of developed market
economies active within various UN bodies and committees. The rule of
one-nation, one-vote and decision making by majority vote -- provided
for in the UN Charter - - was frequently overriden with a claim for
decision making by absolute unanimity. This claim, coupled with a
threat of non-compliance if decisions were taken otherwise, compelled
the third world majority to accept the 'de facto veto' of a powerful
minority. The United Nation's position on accounting policy issues has
been significantly shifted through he use of such 'de facto veto' by the
developed market economies. The conclusion is reached that given the
present state of international economic relations, the economic power of
the TNCs and their home countries, and in spite of the formal power
(i.e. voting majority) in the hands of the third world countries the
'status guo' has largely been maintained. Also, in order to avoid the
present embarrassing reality of frequently facing a host of developing
nations at the UN the developed nations have seen other forums,
particularly the OECD and the lASC, as being more amenable to their own
purposes and eventually have been successful in converting the UN into a
mere discussion forum rather than an accounting regulatory body.